Projected shifts in climate patterns pose major challenges for the effective management of reservoir systems. This study assesses climate change effects on Tekeze hydropower reservoir management and establishes optimal reservoir operation rules considering climate change for both present and future conditions. Water releases and storage decisions were optimized to maximize hydropower production up to the year 2040. To estimate future inflows, the Soil and Water Assessment Tool (SWAT) model was employed, driven by climate projections from the CORDEX-Africa dataset under RCP4.5 and RCP8.5 scenarios. Reservoir optimization was carried out with the Perspective Reservoir Model (HEC-ResPRM), which determined reservoir release, storage and power generation. SWAT simulation at a monthly scale demonstrated reliable performance of the model, with Nash–Sutcliffe efficiency (ENS) and R2 values exceeding 0.7 in both calibration and validation periods. Results indicate rising trends in both temperatures and precipitation for future periods under both climate scenarios. Similarly, annual and seasonal inflows are projected to increase, except during May and June under the RCP8.5 scenario. The optimal operation rules depict that hydropower storage potential at Tekeze reservoir will improve by about 22% and 25% under RCP4.5 and RCP8.5, respectively, relative to the baseline. These findings provide practical insights for water managers, planners and decision-makers to adapt reservoir operation rules in response to evolving climate conditions.